Improving Decision Analysis
Fernanda Rossi
Introduction
Rational decision-making has been the central topic behind a number of studies in recent decades.
Researchers have questioned what it exactly means to be rational and whether humans succeed in
accomplishing this state of mind when making decisions. The general scientific consensus suggests that
humans often engage in irrational behavior thus preventing maximum benefit to the individual.
Therefore, researchers now inquire about the tools and processes humans can utilize to formulate
decisions that ultimately achieve goals and promote individual gain.
Since decision-making is a necessary tool to survival and can have great influences in the life paths
humans follow, numerous pieces of literature are dedicated to explaining and teaching precisely what
individuals can do to make better, more effective, and rational decisions. Often, these tactics for
improved decision-making are formatted into models that target specific types of decisions, such as
lengthy, complex decisions or probabilistic ones. Some of these models include expected utility theory,
multi-attribute utility theory, GOO, and several more. On the other hand, a number of experts see
creating awareness of biases, heuristics, and frames of mind people frequently use to make faulty
decisions as a solution because it allows one to avoid such though processes in the future. Being able to
engage in open-minded thinking and to question all the alternatives to a problem, among others frames of
mind, can effectively and positively alter the ways individuals make decisions. Thus, it is recognized that
humans often make faulty decisions, but fortunately, studies have shown several methods to improve
decision-making so that it favors the individual and his or her goals.
Literature Review
The ways to develop better and more effective decision-making skills can essentially be broken down
into two categories: methods or models and states of mind. Often, the states of mind interact with the
differing methods in that one must engage in a specific frame of mind to avoid a rash thought process and
focus more clearly on goals. Models devised for decision-making, however, are often separated from
mind states because though the two interact, models are often not necessary depending on the type and
complexity of the decision. These models, though, are worth noting and familiarizing with for improved
decision-making in difficult situations.
Models for decision-making tend to center on the goals and values of the individual. Goals can be
defined as the ultimate task one is trying to accomplish while values are based on morals and priorities.
Humans can often state their values quantitatively for the purpose of measuring which values are more
important than others. Laszlo Zsolnai introduces in his book Responsible Decision Making (2009) the
evaluation matrix constructed of deontological values, stakeholder values, and goals. Deontological
values describe making evaluations of the decision alternatives by applying morals or ethical norms.
Stakeholder values, on the other hand, are the evaluations of decision alternatives determined by the
payoffs the individual will encounter when taking risks. The evaluation matrix, therefore, maps goals
with these two value functions so that the achievement of the goal is compared to its value.
The decision tree, on the other hand, as explained by Rex Brown in his book A Rational Choice and
Judgment (2005), uses values as well but to weigh options or decision alternatives. When faced with a
problem, an individual can use a decision tree by first stating the issue and then creating branches with
possible outcomes. From those outcomes, stem other possible outcomes. The process can continue until
desired and will ultimately resemble the format of a tree. After stating the outcomes, an individual must
assign an average value to each by using factual and preference judgments. These quantitative values are
then multiplied and analyzed according to which show the most benefit. Decision trees can be used for
various types of problems, such as when deciding on a career, but often require choices with large
amounts of uncertainty. Value trees, on the other hand, are similar to the decision tree in that they map
outcomes as an aid for decision-making. These outcomes, however, stem from top to bottom. At the very
top are fundamental objectives, such as those we have to maintain survival. The middle of the tree plots
the objectives and on the bottom are the attributes, or smaller, less meaningful preferences.
Brown also discusses in his book another method to facilitate decision-making called “Going
Through the GOO.” This model focuses on goals, options, and outcomes. Goals represent the objectives
that individuals want to achieve. Options are the strategies or actions one can take to achieve them, and
outcomes mirror the results of goals in relation to specific options. These three variables are expressed
qualitatively and organized in a table mapping options versus goals. The outcomes form the body of the
table. This method can be very useful in making various types of decision but requires, unlike the
decision tree, that the options, goals, and outcomes all demonstrate a large degree of certainty.
In addition to the GOO method, Brown also discusses the multi-attribute utility theory. This form of
decision analysis organizes the problem into the various possible outcomes by using decision and value
trees. Personal probabilities are assigned to the attributes, or factors that affect the decision, so that
utilities can be calculated. The highest utility seems to demonstrate the most effective and rational
choice. The MAUT is often used for problems characterized by uncertainty, but it can be complex and
time consuming. Another critical issue is that it takes into account emotions that can sometimes skew
decision outcomes. Overall, MAUT would be a very useful aid when making important decisions, such
as trying to decide whether to buy a house. However, it is not recommended for more simple everyday
decisions. These types of decisions, instead, are more effectively and conveniently made by practicing
more rational states of mind.
Kathleen Galotti and Paul Nutt therefore offer in their respective pieces of literature Making
Decisions that Matter (2005) and Making Tough Decisions (1989) hints as to how an individual can shape
his thought processes so that it leads to more rational and better decision-making. Galotti emphasizes that
decision-making is a skill that can be improved, thus practicing can ultimately lead to expertise. By
practicing, humans can recognize their mistakes and flawed thought processes so that when making future
decision, they can avoid such mistakes. An effective way to learn about faulty decision-making,
however, is to request feedback from others about previous decisions. Individuals can learn from others
how effective a certain decision was and if they achieved the desired results. Galotti states that for
improved decision-making, one must have clear goals, values, and priorities. Knowing exactly what one
wants facilitates decision analysis. All these clues to forming better decisions are essentially
characteristics to specific cognitive styles that favor rationality.
Relationship to Other Topics
Jonathan Baron in Thinking and Deciding (2007) touches on the variations of cognitive styles, as
well, and how some are more conducive than others are to rational decision-making. He discussed
specifically open-minded thinking, which was also a topic of emphasis by Paul Nutt. This author
expressed that being open-minded, or having the ability to devise all the alternatives to a certain problem,
is essential to making better decisions. After stating the alternatives, one can choose from several
methods, such as using a model like MAUT or even simply elimination, to continue decision analysis.
Therefore, open-minded thinking is at the root of rational decision-making.
Both Nutt and Galotti also touched on biases and heuristics, like Baron, that hinder decision analysis.
One such bias is overconfidence, in which the individual puts too much trust in his or her ability to think
of all the alternatives and gather the most relevant information. Often, instead of gathering all the
appropriate information, people use heuristics, such as the availability heuristic that describes one’s
tendency to focus on only the most recent and readily available information. Confirmation bias, on the
other hand, causes one to gather only the information that supports his or her beliefs. Overall, there are
numerous biases and heuristics that often flaw the decision-making process and cause irrational behavior.
Galotti, Nutt, and Baron all emphasize, however, that knowing of their existence can improve cognitive
styles and therefore decision analysis.
There are several ways to improve decision-making, whether it is by using models or simply
changing one’s frame of mind. Though these prove to be effective and result in more rational thinking,
there is no method that can guarantee flawless decision analysis. It is an idea that experts still question
and study. Why do humans often engage in irrational behavior? Why has evolution not prepared us with
the ability to form rational decisions? There are several theories attempting to explain these queries, but
ultimately, decision-making still remains an ambiguous aspect of human nature.
Works Cited
Baron, Jonathan. Thinking and Deciding. New York: Cambridge UP, 2007.
Brown, Rex. Rational Choice and Judgment Decision Analysis for the Decider. New York: WileyInterscience, 2005.
Galotti, Kathleen M. Making Decisions That Matter How People Face Important Life Choices. Mahwah:
Lawrence Erlbaum, 2002.
Nutt, Paul C. Making Tough Decisions. San Francisco: Jossey-Bass, 1989.
Zsolnai, Laszlo. Responsible Decision Making. New Brunswick: Transaction, 2009.